The Cloud and Virtualization: A Race to the Middle

For much of enterprise history, successful innovation emerged from very small organizations and quickly worked its way up the chain to effect major changes at the very large. It's the classic tale of the mouse removing the thorn from the lion's paw.

But it appears that virtualization and the cloud are taking a different track. While large organizations ultimately should benefit from these two advances, the mid-level enterprise increasingly looks to be in the driver's seat.

If you think about it, it makes a lot of sense. Small businesses have little IT infrastructure to begin with, so the cost savings and efficiency improvements of both virtualization and the cloud are limited. In contrast, large organizations have complicated infrastructures that would, in fact, benefit greatly from both developments, but will likely continue to leverage legacy systems and architectures infrastructures for at least a few more years.

Mid-level companies, on the other hand, will have an easier time switching over to the cloud and are more than likely stretched enough for cash these days that lower-cost alternatives to internal IT infrastructure must sound awfully good.

Traditional IT vendors who are rapidly transitioning their product lines over to cloud services certainly aren't blind to the mid-tier angle. Symantec, for one, sees a sweet spot in firms ranging from 2,000 to 10,000 employees, which its research shows are more eager than other sectors for significant change. Its top priorities likely will be development and management of heterogeneous environments and creation of a unified platform for both physical and virtual resources.

Even distributors like CDW are finding that among medium-sized organizations, only about half report being in the final stages of virtual deployment, and most of those say their physical-to-virtual ratios are running about 2:1. Among the barriers to even greater utilization are those old bugaboos security and incompatibility between virtual and legacy hardware/software platforms.

Targeting the middle also helps vendors in another key way: It increases the level of product most in demand around the globe. In much of the developing world, mid-level enterprises rule the roost. That's why we're seeing companies like Dell, which has always had a tough time competing against the IBMs, HPs and Ciscos for top-tier deployments, is targeting cloud services overseas through partnerships like the recent one with China's Infobird. The company cites research indicating China has more than 42 million small and medium enterprises, with only about 10 percent employing such basic applications as e-commerce.

Mid-level organizations seem to offer the best of all worlds for virtual and cloud technologies. They have the means and the desire to revamp their existing systems for something better and cheaper, and the community is broad and diverse enough so that the giant vendors can't dominate the market through a few key business relationships.

That makes for a vibrant business environment as IT makes the transition from static, siloed infrastructure.

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